IVA support and discussion thread

Depth_Charge

Find_The_Real wrote: »

I just wanted to wish all my fellow IVA friends on here a Happy 2014, I hope it is a good one, full of joy and happiness, good health and good fortune.

Hi

Well done for starting this fascinating thread and for your very much appreciated intelligent balanced posts a real credit to this particular forum section

You have certainly made me think more on the straight and narrow at times, just my take however:)

DC

Depth_Charge

UpToMyNeckInIt wrote: »

...a number of very good points as always from DC.

Totally agree that perspective IVA customers need to carefully consider all options.

I take your point as well about equity release turning unsecured into secured debt. But anyone who is a homeowner, contemplating an IVA, has to consider this (as I did) Quite honestly, I do not believe forums posts where customers claim they were 'not aware' of, or 'didn't understand' the equity release clause. My IVA company are blinkin' useless, but even they made sure I thoroughly understood it, and the 'calculated risk' that I was taking.

The whole point of an IVA is to repay what you can reasonably afford. For those renting, it is done typically in 5 and occasionally 6 years, and generally of course the same applies for home-owners as well, given the real-world difficulty in obtaining a secured loan/remortgage. (I accept however that lending criteria could relax over the next 2-3 Years).

But yes, the secured loan thing is a game changer: For IVA companies to proclaim to homeowners 'You could be debt free is only 15 Years' does not have quite the same ring to it as '5', does it?

However, without wanting to sound too controversial here, my attitude towards equity release via the secured loan route, has relaxed somewhat. Compared to a sub-prime remortgage for the entire property debt, keeping your prime mortgage, and only having to take out a relatively small loan (even with the shocking fees and high-APR), will actually work out massively cheaper in the long-run for many (as I have illustrated previously). People also forget to mention that strict affordability criteria apply.

At the end of the day also, I have to try and see it from my creditor's perspective: As their customer, I chose to go into debt (due in part to irresponsible borrowing, and in part due to unforeseen personal circumstances). Therefore, if during my IVA, both my properties increase significantly in value to the point that come Month 48-54, I am sitting on a s**t-load of equity, I understand that it is fair that I attempt to release some of that. I am still going to be left with a minimum 15% equity. That is fair, some may argue.

Don't get me wrong, I am going to do my damnedest (within what I legally can do), to ensure that I do not go down the equity release route: The fact that both mortgages are in joint names instantly halves what I would otherwise have to release, and that we are borrowing 10X our current household income, pretty much guarantees that further borrowing is not going to happen anyway. (2 of the many things I considered when going for the IVA over a DMP).

However, I suppose now, for a homeowner with significant equity and with a mortgage of only say 3X their income, thinking of an IVA: They ought to consider, 1). Consolidating their debt with a secured loan from the start (providing they have 'learnt their lesson' on bad debt; or 2). Comparing IVA/equity release vs DMP more carefully.

Last post of 2013 for me.

Thoroughly enjoyed the debate here will all of you, and I've learned a few things as well.

Looking forward to more of the same in 2014.

HAPPY NEW YEAR TO ALL!!!

Hi

Catch you later in 2014 all being well:)

DC

Find_The_Real

Some very interesting points from you both and some very interesting figures, especially the terminations and the fact that bankruptcy seems to have dropped quite dramatically compared to IVA's and DRO's. Is this a sign of a slightly improved housing market or are people looking at other options such as dmp's, secured loans and additional credit to survive (would be really useful if we could have data on that to compare!)


I do think there is going to be increase in those seeking debt solutions as budgets are tightening with rising living costs and stagnated wages and I do echo the sentiments on here, that with the current and future issues with an IVA is to consider that option very carefully against other debt options. I was fortunate with no equity and a F&F but for those looking to do one over 5-6 years, I would seriously consider every pro and con of all debt remedies before deciding. Also don't just rely on one charity or company to give that advice, you really need to shop around to get the best advice possible.

sakerclive

Hi all new hear, be gentle lol.
I took out an IVA February 2009 in a joint one with the wife. We were advised by The halifax (mortgage provider) to go with Freeman Jones as I believe they have interests in them!. We originally began paying £300 per month, but the last 18 months-2 years we had the payment reduced to £150 due to the ever increasing utility and overall cost of living. The only time we get any correspondance or interaction with them is when they want the 6 monthly 'audit' to make sure we're still paying out the same or not eaning extra (even though we have to forward payslips every 2 months). Next month we should be finishing the agreed 5 year term but they haven't contacted us to say so but have on occaision said they might carry the IVA over for another 12 months, equating to 6 years!! Is this normal or legal? Thanks in advance. The overall debt was £32k.
Also, at the begining over the IVA I asked about the possibility of the (then new) PPI claims being taken into consideration and was told that Freeman Jones do not use PPI against the IVA. Now last year, they began to send letters requesting that we give them as much info on the PPI scheme so they can claim any monies owed to us for the IVA!!!

UpToMyNeckInIt

Hi sakerclive,

You might want to dig out your IVA agreement and see what yours says about equity release.

How much mortgage do you have in relation to what your house is worth?

I am surprised that FJ have not contacted you, reminding you that you have to get property valuations and then, depending on if there is any equity, attempt a REMORTGAGE (NOT a secured loan), at Month 54. (Usually require attempted remortgage up to 85% LTV).

Worth you chasing this up (your IVA firm will only make you go through the rigmarole later on - they might be late, but they will not forget, and it will give them a nice excuse for delaying your completion certificate).

If you have little/no equity, your IVA would normally conclude in year 5. If you have equity and are unable to remortgage (unlikely that anyone will lend to you), then your IVA will go on for a 6th Year.

In stating the above, I am assuming that you have a protocol-compliant IVA.

Also, I am uncertain if FJ may want you to extend the iva even further, due to your reduced payments, presumably affecting your originally pledged dividend (do you know?). A reduction of up to 15% is often tolerated, but much more than that, and FJ may want an IVA extension, or may call a creditor's meeting to ask them to accept your contributions to date (up to yr6) in full & final settlement.

Good luck.

sakerclive

thank you for your reply; I don't think the property has much if any equity as since having the IVA, we haven't been able to do any worth while repairs etc. As for getting a remortgage, that will be a joke as prior to getting the IVA, I asked the bank for a loan which would have covered the debt and we would have been about £100 per month better off compared to what we were paying then but although the bank could clearly see the figures and see we would easily be able to pay they refused simply because the bank couldn't be seen to give out money to someone that was struggling!!! I am now working part time and my income has gone from £25k down to £9k!!! The biggest problem I've found with FJ is that they 'assign' a person as our personal manager, then if we contact them for any reason, that person no longer works for them and we have another and no one seems to know what's gone on or been said previously. I fax our payslips every 2 months and even after nearly a year later they send letters saying they haven't recieved them for March and April. I then email them the slips again and the original fax cover notes proving that they were sent etc. and 2 weeks later another letter arrives asking for the same again!!!
i am going to phone them over the next week to find out what is exactly going on and any additional term needs to be re-negotiated as the original paperwork states 60 months. Or am I being niave? There is no mention of any extension in the original paperwork or after the creditors accepted the reduced payments.

Find_The_Real

Just a little bump back up the page!

Still all very quiet now I am in the IVA and now just impatiently waiting for the PPI to be sorted and that lovely CC to be sent out.

Certainly a bit of a contrast to this time last year though when I was setting up the DMP and making plans to attend for the house repo, things are looking a lot more positive for 2014.

Depth_Charge

Find_The_Real wrote: »

Just a little bump back up the page!

Still all very quiet now I am in the IVA and now just impatiently waiting for the PPI to be sorted and that lovely CC to be sent out.

Certainly a bit of a contrast to this time last year though when I was setting up the DMP and making plans to attend for the house repo, things are looking a lot more positive for 2014.

Hi

Well, 2014 is now under way and lets see what it brings:)

Good luck with the IVA

DC

Nannerb

Hi. I'm currently in a personal IVA in my own name, my wife is about to receive some inheritance money, does this effect my IVA in any way, do they have any claim on her money ?

Thanks

UpToMyNeckInIt

Nannerb wrote: »

Hi. I'm currently in a personal IVA in my own name, my wife is about to receive some inheritance money, does this effect my IVA in any way, do they have any claim on her money ?

Thanks

If the inheritance has been left only to your Wife, then you (she) will be able to keep it all.

Your Wife is not in the IVA, and therefore not bound by its terms as you are.